Housing has been recognized as a basic human need by all governments of the world. In India, the housing scenario presents a multitude of problems. With the rising costs of real estate and lack of affordable housing, not every family in India is privileged to own a house they can call their own. The Government of India’s Pradhan Mantri Awas Yojana (PMAY) is a scheme that comes to the rescue of low-income and mid-income groups. Here’s what you need to keep in mind when you too aim to make the most of PMAY and become a homeowner.

Who is Eligible to Apply under PMAY?

The Pradhan Mantri Yojana, which envisages providing affordable housing to all by the year 2022, has three categories that define who is eligible to apply for an interest-subsidised loan under the scheme. Those under the economically weaker section (EWS) are classified according to their annual household income of under Rs.3 lakhs, those in the low income group (LIG) are classified according to household income between Rs.3 lakh to Rs.6 lakh and those in the middle income group (MIG) includes families whose annual income is under Rs.18 lakh.

To be eligible for the scheme, you and your family comprising yourself, your spouse and your unmarried children should not have applied to a similar scheme earlier nor have owned a house in the past. The scheme also gives preferences to widows, single working mothers, persons belong to the scheduled castes and scheduled tribes, differently abled people and backward classes.

How does the Interest Subsidy Helps You save Costs on Housing?

The interest subsidy or financial assistance provided by the government to enable those in EWS, LIG and MIG categories to take home loans is reported to make each equated monthly instalment (EMI) cheaper by Rs.2000. Depending on which of the three broad categories you fall in, this could result in savings of nearly Rs.2.6 lakh on the repayment expenses of the entire loan.

Let us say you are an eligible beneficiary earning a combined household income of Rs.14 lakh annually. You apply for an interest subsidised loan of Rs.9 lakh at 8.5 % interest. The interest subsidised portion of the loan works to be Rs.1,72,617 leaving you with a balance loan amount of Rs.7,27,383.

How to Apply for PMAY?

Here’s how you apply for eligibility under the PMAY scheme online:

Go to the Pradhan Mantri Awas Yojana official website: https://pmaymis.gov.in/. Next, choose the benefits under the three components shown in the citizen assessment drop down box. Third fill in your Aadhaar details. Then you will be redirected to the application form where you will need to fill the required details correctly. Once this is done all you need to do is enter the captcha code and save a copy of your application. If you are applying for PMAY eligibility online you incur no charges. However, if you apply for it offline, there are registration charges amounting to Rs.25 in addition to GST.

If your application is found to be error-free it is then dispatched to the Central Nodal Agency. On approval, the CNA sends the subsidy amount to the lending agency. This is subsequently credited to your account thereby reducing the loan amount you have to repay. The subsidy is restricted to certain loan amounts depending on your annual income. Take note that if the loan amount exceeds the amount eligible for subsidy, you bear the responsibility of paying interest on the excess amount at the applicable rates.

What are the Other Features of PMAY?

Since you have to apply for the scheme by entering your Aadhaar details, no beneficiary can apply for interest subsidised scheme twice. The scheme’s guidelines allow you to choose the tenor of the loan, but this should be less than 20 years. Not all lenders in the country provide this scheme, so check if your chosen lender offers a Home Loan which passes on this benefit before proceeding. The subsidy benefit can be used by you not only to build a new house, but also to expand or renovate your existing home.